Legislators question $98 million legal bill, then head of agency resigns

Jon Steverson resigned Friday as head of the Florida Department of Environmental Protection. Florida Dept. of Environmental Protection

Jon Steverson resigned Friday as head of the Florida Department of Environmental Protection. Florida Dept. of Environmental Protection

TALLAHASSEE

Florida’s top environmental regulator abruptly resigned Friday, two days after House budget officials expressed disapproval of his management of a legal contract that had ballooned by more than $54.4 million in the last two years over a water fight with Georgia.

Jon Steverson, who has led the Department of Environmental Protection under Gov. Rick Scott for the last two years, will step down effective Feb. 3 and go to work for Foley Lardner, a spokesman for Gov. Rick Scott told the Tampa Bay Times on Friday.

Foley Lardner is one of the four law firms hired by the state to handle its 16-year lawsuit against Georgia over water rights to the Apalachicola, Chattahoochee and Flint River Basin. Florida sued Georgia in 2013 claiming the state’s excessive use of water from the Chattahoochee and Flint rivers was endangering Florida’s oyster industry and harming the economy of North Florida.

Since 2001, the state has been billed $97.8 million on the water wars, according to an analysis by the House Appropriations Committee, and has spent $71.9 million to date.

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Nearly $54.4 million of it was spent in the last two years after Florida asked the U.S. Supreme Court to intervene and the court appointed a special master to resolve the dispute.

In October, Ralph Lancaster, a civil attorney from Portland, Maine, held five weeks of hearings in a Maine courtroom. Earlier this month, he ordered both sides to meet for mediation and submit a memorandum to him by Jan. 26 before he makes a recommendation.

After years of budgeting little more than $4 million in attorneys fees, lawmakers allocated nearly $17.5 million in 2015-16 for legal fees and costs in the case and another $18.6 million for the 2016-17 budget. The department tapped $5.4 million from its reserves for a total of $23.9 million in available funding this year.

Two weeks ago,Steverson said he needed $17.1 million more to finance the litigation. He filed a budget amendment asking the House and Senate Joint Legislative Budget Commission to approve another $13 million but said the total cost for the year would be about $41 million.

Rep. Carlos Trujillo, R-Miami, the House Appropriations chairman who is himself a civil litigation attorney, said the numbers “struck me as excessive — as if the supervisors of the project lost control of the costs.”

He asked Steverson to justify the expenses, asked for a detailed breakdown, including the names and hours of each attorney, as well as the cost of expert witnesses, and suggested the item may not be approved.

According to a spreadsheet obtained by the Herald/Times, the numbers showed that the lead lawyers, Washington-based Latham Watkins, would be paid $35.9 million between 2015 and 2017.

Foley Lardner, the Florida firm where Steverson’s predecessor, Hershel Vinyard, works and where Steverson is now headed, would be paid $2.6 million over the same time. Two other firms also were paid lesser amounts: $1 million to Blankenau and $966,000 to Carlton.

The records also show that Latham Watkins charged the state for 32 to 35 full-time legal staff members for 40 hours a week over four months. The firm also charged significantly more than the other firms for lawyers of comparable experience.

For example, while Foley Lardner charged an hourly rate of $220 for junior associates — those with five years or less experience — Latham Watkins charged $395 an hour for lawyers with three years or less experience and $575 an hour for lawyers with 3 to 10 years’ experience. Partners at Latham charged $825 an hour, compared with Foley’s partners, who charged $450 an hour.

Expert witness and consulting costs totaled $11 million over the 16 years, half of it in the last two years.

“With litigation of this magnitude, you have a management company that manages the cost of this litigation, but there were so many overages with this,” Trujillo said. “It seems a runaway train, and there were no cost control measures.”

DEP was allowed to seek outside counsel in the case when Attorney General Pam Bondi declined to be the lead lawyer on the case. Trujillo now wonders whether anyone has scrutinized the expenses.

“Was somebody sitting down and making sure the time is commensurate with the work that is done?” he asked.

Meanwhile, Georgia Gov. Nathan Deal signed an executive order last week increasing the money his state has spent on litigation in the last year to nearly $30 million, according to a report in the Atlanta Journal-Constitution. Georgia’s lead law firm also is based in Washington, D.C.

Trujillo said that Florida’s lawyers have told him that Georgia is driving the litigation, but, he said, if that’s the case, Georgia’s costs should be higher than Florida’s, not less..

“It raises even more questions about why we are overpaying,” he said.

Steverson’s request for additional money will be taken up by the Joint Legislative Budget Committee at Tuesday’s meeting. Lauren Engel, spokesperson for the agency, said the governor’s office has approved the request. She added that the timing of Steverson’s resignation had nothing to do with the concerns over the contract but “is simply the result of receiving an offer in the private sector.”

In his resignation letter to Scott on Friday, Steverson said he was “grateful to have had the opportunity” to participate in the lawsuit. “Through this bold action, you clearly demonstrated that the state of Florida will staunchly protect our environment and our people.”

Florida Secretary of Transportation Jim Boxold will resign from the department on Feb. 3 to work as a lobbyist for Capital City Consulting.

DOT Assistant Secretary for Finance and Administration Rachel Cone will take over as interim secretary starting Feb. 4.

The bulk of Cone’s experience is in communications, not transportation. She previously served as Gov. Rick Scott’s deputy chief of staff, communications director at the Florida Department of Environmental Protection and as a reporter at the Florida Times-Union. She has a bachelor of arts in journalism from Auburn University.

“Rachel has been part of my team since 2011 and has done an incredible job working hard for Florida families,” Scott said in a release. “I am confident she will continue to do great work and build upon the successes of FDOT by ensuring we have the best transportation infrastructure for our residents, businesses and visitors.”

Like his predecessor Ananth Prasad, Boxold will leave the DOT to join the private sector. Boxold, who currently makes $141,000, oversaw DOT’s $10 billion budget, 6,200 employees and the largest work program in the department’s history.